Critical Illness

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What is critical illness cover?

Critical illness cover is there to give you a financial safety net if you get diagnosed with a condition listed in the policy. This tax-free payment is a one-time thing and can be used to cover your treatment costs, mortgage, rent, and even changes to your home like making it wheelchair accessible if that’s needed.

Understanding how it works. So figuring out when it’s a good idea to have, and considering what factors to keep in mind. So when you’re getting it are all important steps in making the most of this type of insurance.

Which illnesses does it cover?

Critical illness insurance steps in if you’re hit with certain medical conditions and injuries listed in the policy. So it’s like a one-time financial cushion, and once it’s paid out, that’s usually the end of the policy.

The conditions covered can change from one insurance company to another, and some plans are really wide-ranging. Some insurer’s cover more than 50 conditions and  others focus on a smaller set.

Here are a few examples of conditions that could be part of the deal:

  • Stroke
  • Heart attack
  • Certain types and stages of cancer
  • Conditions like multiple sclerosis
  • Major organ transplant
  • Parkinson’s disease
  • Alzheimer’s disease
  • Traumatic head injury

The policy might also take into account permanent disabilities caused by an illness or injury.

In some cases, if you’re diagnosed with less severe conditions, or if your child gets diagnosed with one of the conditions, so you might still get a payment, but it could be smaller.

Just a heads up, so not all conditions are covered, but some things like specific non-invasive cancers, high blood pressure, and broken bones might not be part of the package. And remember, most policies will lay out how serious a condition needs to be to qualify for a payout.

Thinking about getting critical illness cover could be a good idea if:

  • Your income is a big support for you and your family
  • You don’t have a stash of savings to rely on if you get really sick and can’t work
  • Your job doesn’t offer benefits that would help you if you’re off work for an extended period due to illness.

On the flip side, you might not need it if:

  • You’ve got enough savings to handle regular expenses like bills and rent or mortgage payments
  • You’re not financially tied down, like having a mortgage or dependents
  • Your partner can manage living costs and shared financial responsibilities, like a mortgage
  • You’re already covered by your workplace’s employee benefits plan.

How much critical illness cover do I need?

It all comes down to your unique situation and what would give you the most peace of mind.

Critical illness insurance is usually bought alongside other types of cover. It’s common to pair it with a life insurance policy but it can be purchased on its own.

The level of coverage you require hinges on factors such as:

  • Debts you have
  • How many dependents rely on you
  • The benefits you get from work
  • Your take-home pay
  • What you pay for your mortgage or rent
  • Any other insurance you’ve got going on.

You’ve got the flexibility to tweak the coverage amount based on what suits your needs and your monthly budget. It’s all about fitting it to your situation but is also important to do your research or speak to an advisor who can help guide to the best solution for your situation.

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